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What happens if you have every hedge fund, every 401k, every bank, every investor dumping their money into the safe bet of oil (real estate, stocks, bonds every other sector isn't as good or is losing money lets say). They know that consumers would pay up to $1000/barrel (a guess, but I'm sure they have graphs of demand vs. price and they aren't too impacted by it. At least the profits on the expensive oil will make up for lower sales.)
The delivery thing is a problem, since the oil investors don't want the barrels of oil. But since demand has (and probably will) remain fairly constant (we cut our use by 3.8% since last year, price went up 30%), they know that the OR will buy it from them.
They aren't trying to corner the market or take a run at it by hording all the oil in a huge imaginary tank and preventing it from being sold, then selling it when we've run out of oil to the highest bidder. But, they are acting like middlemen and not adding anything of value. And if their (S) only role is to manage risk, then I think the OP and OR should be made to play the real game and have to lose sometimes. he thing is, as long as there is a demand for every ounce of oil produced, it will be treated as a commodity and the 'market' will set the price. If demand fell by half, I bet you would see them try to make it a product and set their own price (they would say we can't produce or refine it for less than $2/gal, even though it would only cost them $1 let's say) This would be the cartel setup that congress was trying to find.
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